Florida Lottery: Upping the Ante

At 25, Florida's Lottery is gambling on some new initiatives to boost its sales.

| 11/9/2011

Lottery Secretary Cynthia O'Connell [Photo: Colin Hackley]

The Florida Lottery turns 25 this year, a mature business in a mature industry in a state that instead needs sales to go up like a rocket.

To that end, Lottery Secretary Cynthia O'Connell, appointed by Gov. Rick Scott earlier this year, calls her organization "aggressive" in its pursuit of new revenue through initiatives such as a rebranding effort, new products, vending machine sales and a coming frequent-players club. In October, it scored a major victory when it began selling tickets in 27 Walmart neighborhood markets in a pilot program. Walmart has historically refused to sell lottery tickets in its stores in the United States.

Voters by a 2-1 margin in November 1986 approved a constitutional amendment creating the Lottery to fund education. The first tickets were sold in January 1988. Profits from ticket sales have generated more than $22 billion for education. "That's huge," O'Connell says. The money has funded public schools, school construction, higher education and Bright Futures scholarships.

"I think it's fair to say without the Lottery contribution to education, our public education would be far more troubled," says Dominic Calabro, CEO of Florida TaxWatch. "Look at the money that would have had to be found from other sources. With all its perceptions and challenges, it's been a net contributor to Florida."

Chief in the challenges department has been the rise of competing gambling opportunities and a recession-driven sales slowdown just as the state most needs the money. Lottery contributions to education were down 4.6% in 2010-11.

O'Connell says the Lottery Department, already one of the most efficient in the nation measuring revenue against operational expenses, will cut costs more while boosting sales. This year, she projects sales to rise 5% to $4.22 billion with $1.25 billion going to education.

Lottery officials are visiting top retailers to push for more sales and more outlets, aiming to increase sales sites to 13,700 from the current 13,200. A VIP frequent-players club, a successful strategy in other states, will launch in January. Says O'Connell: "Florida's late to the game in this."